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PwC, the UK-based Big Four accountancy firm, has been suspended from operating in China for six months and fined £47 million for its role in auditing the now-collapsed property giant Evergrande.
Chinese authorities accused PwC of helping to conceal fraud at Evergrande, which collapsed in January following a sharp decline in property values across the country. PwC China admitted that its work on Evergrande had "fallen unacceptably below the standards" and issued an apology for the effects this had on its clients.
According to Chinese regulators, PwC was aware of "major misstatements" in Evergrande's accounts during its audits. The money PwC earned from its auditing services for Evergrande has since been confiscated, with officials stating the firm had "seriously eroded the basis of law and good faith."
In response to the suspension, Hemione Hudson, PwC's head of global risk and regulatory affairs, has been appointed to lead the firm's operations in China on an interim basis.
Evergrande, which developed properties in over 280 cities across China, has been accused of inflating its revenues by US$78 billion (£61.6bn), further complicating its financial situation and contributing to its eventual collapse.
